New Zealand Wool Services, the country's largest wool exporter, says prices at this week's wool auction fell, in particular for varieties sourced from the North Island.
Compared to the previous North Island selection on December 21, 2016, fine crossbred fleece and shears were firm to 4 percent cheaper, coarse full fleece was 3 to 6 percent cheaper with shears firm to 5 percent cheaper. First lambs fleece were firm to 5 percent cheaper with coarse long oddments up to 7 percent stronger and short oddments 7 percent cheaper.
The South Island auction saw prices hold better, with fine crossbred fleece and shears firm to 3.5 percent cheaper, coarse fleece firm to 1.5 percent cheaper and second shears generally firm. Lambs fleece were 3 to 5 percent firmer with coarse oddments firm to 4 percent dearer.
Restricted activity was reported with manufacturers from China, Australia and western Europe.
Shaye Lee, an analyst at NZX Agri, said in a note that high supply was meeting a relatively soft market.
"Prices for fine and strong crossbreds generally trended down, with high supply, soft demand, and the strong NZ currency being limiting factors to the market," Lee said. "Lamb wool generally traded at a 43 percent discount on a year ago level. Both fine and crossbreds are still under downward pressure - fine crossbreds generally traded at a 35 percent discount on year-ago prices."
Industry data from Beef and Lamb New Zealand for July to September 2016 shows wool exports were down by around a third compared to the same period in 2015. This is partly due to sharp gains in the value of the NZ dollar, in particular against the British pound following the vote by the UK to leave the European Union.